Report: Lahey Health, Winchester Hospital Merger Could Save $2.7M Annually

The Massachusetts Health Policy Commission has approved a preliminary report finding that Winchester (Mass.) Hospital's proposed affiliation with Lahey Health in Burlington, Mass., could reduce healthcare spending by as much as $2.7 million per year, according to a report from The Boston Globe.

The savings would come from shifts in use from higher-priced hospitals to Lahey and possible reductions in Winchester Hospital physician prices, according to the report. However, the commission also identified two concerns Lahey and the hospital must address before the commission votes on a final report in May. The first is the merger could allow the two organizations to raise prices and ask for higher reimbursement from private health insurers. Second, the commission is concerned Lahey could drive up medical spending by adding facility fees to the hospital's service bills, according to the report.

Howard R. Grant, MD, Lahey's president and CEO, told the Globe his organization didn't plan on adding facility fees or raising prices at Winchester Hospital.

The Health Policy Commission announced last December it would conduct a cost and market impact study of the proposed transaction. David Seltz, the commission's executive director, issued a statement saying the transaction raises the potential for Lahey to leverage for higher prices through joint contracting with Winchester Hospital.

This past June, Lahey signed a letter of intent to affiliate with Winchester, and the two organizations reached a formal agreement in September. Under the agreement, which is not a full-scale merger or acquisition, leaders from the 229-bed Winchester will join Lahey's board of trustees, and the hospital will become an affiliate of the system as part of a "shared governance" model.

More Articles on Hospital Affiliations:
Massachusetts Commission to Study Lahey Winchester Hospital Affiliation
Lahey Health, Winchester Hospital Reach Formal Affiliation Agreement
Winchester Hospital Chooses Lahey Health for Affiliation